Breaking Down the Supreme Court, the Affordable Care Act and the Individual Mandate

To understand how US Supreme Court arguments over the Patient Protection and Affordable Care Act will be different and why it will dominate the news until the court reaches a decision in June, consider this: The time allotted for arguments – the period in which plaintiffs and defendants present their views to the justices – is six, instead of usual one. Moreover, the proceedings will transpire in not just one day, but three.

There are several issues up for debate but the most significant, and the one you have likely heard about, is the individual mandate. The Affordable Care Act requires all individuals without health insurance to purchase it or pay a penalty (not a tax). The mandate doesn’t apply to most people, since those with Medicare, Medicaid, or employer-provided insurance already meet the necessary waiver requirements.

The five-to-10 percent of the population that doesn’t fulfill the waiver requirements will be able to purchase subsidized insurance, based on household income, through state-based exchanges to open in 2014. Penalties for noncompliance are significantly less than the price of insurance ($695 to $2,000, based on income), and failure to abide will not result in criminal penalties.

Why is the individual mandate generating controversy? Twenty-six states challenging the law (along with business group and four individuals) see the obligation to purchase health insurance very differently than the federal government. Here, very briefly, is the distinction:

The government: The US Constitution’s Commerce Clause authorizes the federal government to regulate interstate commerce. Simply, if one state were to create trade barriers with another, the federal government can intervene under the authority granted it in the constitution. Because healthcare is a service that everyone requires at some point, we are already participants in the marketplace. Those who choose to stay out of the system oblige others to pay for the care they eventually need–essentially depending on the support of their neighbors. Though more complicated, but the crux of the matter is this: A functioning national market needs everyone to participate and by virtue of its constitutional powers, the United States government can facilitate the process.

The states: The argument against the US Constitution’s Commerce Clause involves a different principle. It is the principle of liberty versus forcing citizens “inactive” in the healthcare marketplace to purchase a product they do not desire. Opponents to the Affordable Care Act are not arguing against universal healthcare* per se. Rather, those against the individual mandate believe the right of the individual “to be left alone” supersedes the right of the government to require purchase of an insurance contract. The plaintiffs also question whether healthcare is different from any other good (e.g., if forced to purchase healthcare, why not cars, food, or any other product).

Handicappers are predicting the Supreme Court will uphold the law. A majority of the public are critical of it, likely on principle, for various reasons–based on both truths and falsehoods. However, the opinions embedded in the case raise fundamental constitutional issues, and while they don’t directly affect everyone, we all have a vested stake due to their nature. Affordable Care Act issues foster big questions, and that explains the case’s “generational” character.

The outcome, while based on the Supreme Court justices’ interpretation of law (hopefully not politics), has implications for future policy and governance. Think Citizens United, Roe vs. Wade, and Brown vs. Board of Education. Yes, we are talking broad, and the decision will potentially alter how government oversees, or continues to oversee, healthcare delivery.

Open your civics textbooks, because it will be that kind of spring. Unless the Kardashians have something to say, in which case all bets are off. LOL. I think.

* Medicare is a universal (i.e., entitlement) program everyone pays taxes into throughout their working lives. The government uses a tax to finance that program (just look at your paystub deductions—1.45%), and it’s grounded in the constitutional principle known as the Taxing and Spending Clause. That differs from employing a penalty upon failure to purchase a private product–in this case insurance–to accomplish the same ends.

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